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What no one tells you about out-of-network bills

Understanding out-of-network bills 

Let’s look at a very common scenario. Jane has a C-section at a hospital that isn’t in her network. She realizes her mistake after it’s too late: a bill in the mail for $26,000.

$26,000.  

Convinced something must be wrong, she consults her health plan’s Explanation of Benefits (EOB). 

Within the EOB, Jane reads the following about her health plan: 

Screen Shot 2014 09 02 at 10.09.14 AM

She breaths a sigh of relief assuming the hospital has made a huge mistake. The most she’ll have to pay for the delivery of her very adorable baby girl is $10,000. Because that’s what out-of-pocket maximum means, right?

Jane queries her hospital about why they sent her a bill for $16,000 more than her out-of-network, out-of-pocket maximum. After talking to five different people at the hospital, she gets a vague answer that she doesn’t really understand. But what she does understand is she is responsible for paying the $26,000 bill. Yikes.

What no one tells you about out-of-network bills 

No one tells you that out of network bills could be higher, even exorbitantly higher, than your out-of-network, out-of-pocket maximum. Why?

Because some hospitals charge higher prices than what your insurance company considers reasonable. When you go out of network, your insurance company doesn't have negotiated rates with the hospital and therefore you are at the mercy of the hospital's prices. If your hospital wants to charge $80,000 for a $10,000 procedure, that's their decision. As a result of visiting an out-of-network provider, your insurance company won't cover it like they would if you were in-network.  

What most do not understand about out-of-network hospital bills is hospitals and carriers sat down at the negotiating table and couldn’t agree on prices for all procedures, surgeries, tests, etc. For example, we talked about how HCA and BlueCross BlueShield of Tennessee (BCBST) sat down to discuss prices and couldn't agree. Therefore, two of the BCBST networks, Network S and Network E, do not include HCA hospitals. Only BCBST's most expensive network, Network P, includes HCA hospitals. The result of providers and carriers not agreeing on pricing is networks--a carrier decides where you can and can't seek in-network care. 

The easy way to know if a hospital and carrier couldn’t agree on price is the “out-of-network” moniker. Out-of-network means that there aren’t negotiated rates for your particular carrier and network. When there aren’t negotiated rates, you are responsible for the balance between the negotiated rate and the rate for the procedure. This balance is referred to as balance billing

Back to Jane's $26,000 hospital bill 

Let's continue with Jane's $26,000 hospital bill. Is she getting screwed? Are there errors in the bill

In Jane's case, her carrier thinks a fair rate for an out-of-network C-section is $14,000. Jane’s hospital charges $30,000 for a C-section. 

Here is a breakdown of Jane’s $26,000 hospital bill:

out of network bill 

The bottom line is that Jane is responsible for paying $26,000. Let's look at some options for either reducing out-of-network bills or paying in installments. 

Options for dealing with out-of-network bills

Before this entire article completely depresses you, we did want to let you know about some options available for dealing with out-of-network bills. 

  • Negotiate the bills with your hospital. You can approach your hospital and make an appeal for them to reduce the bill since you were balance-billed. You’ll also want to make sure that your insurance provider paid what it agreed to pay (see your EOB). 
  • Hire someone to negotiate the bills for you. If you hire an expert to negotiate the bills for you, you could have better results and will definitely save time. Bernard advisors are equipped to help you negotiate if you decide you need our help. 
  • Ask the hospital about a payment plan. Most hospitals will allow you to pay your bill in installments. Inquire about paying the bill over time with no interest. 

We hope you never see an out-of-network bill, but if you do, you’ll now be a savvy healthcare consumer equipped with what you need to handle the charges. 

If you enjoyed this post, you may also like Out-of-pocket maximums: Why you still might have healthcare expenses

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